Magellan Health, Inc. (NASDAQ:MGLN) Q3 2015 Earnings Conference Call Transcript
Oct 27, 2015 • 10:00 am ET
Welcome and thank you for standing by for the Third Quarter 2015 Earnings Call. At this time all participants are in listen-only mode. (Operator Instructions). Today's conference is being recorded. If you have any objections you may disconnect at this time.
Now, I will turn the meeting over to Renie Shapiro Silver. Ma'am you may begin.
Renie Shapiro Silver
Thank you. Good morning. Thank you for joining us today for Magellan Health's third quarter 2015 earnings call. This is Renie Shapiro Silver, SVP of Corporate Finance. With me today are Magellan's Chairman and CEO, Barry Smith; and our CFO, Jon Rubin.
(Forward-Looking Cautionary Statements)
In addition, please note that Magellan uses certain non-GAAP financial measures when describing our financial results. Specifically, we refer to segment profit, adjusted net income and adjusted EPS, which are defined in our SEC filings and in today's press release. Segment profit is equal to net revenues less the sum of cost of care, cost of goods sold, direct service cost and other operating expenses and includes income from unconsolidated subsidiaries, but excludes segment profit from non-controlling interest held by other parties, stock compensation expenses, as well as changes in the fair value of contingent consideration reported in relation to acquisitions.
Adjusted net income and adjusted EPS reflects certain adjustments made for acquisitions completed after January 1, 2013 to exclude non-cash stock compensation expense resulting from restricted stock purchases by sellers, amortization of identified acquisition intangibles and changes in the fair value of contingent consideration recorded in relation to acquisitions. Please refer to the tables included with this morning's press release which is also available on our website for a reconciliation of these non-GAAP financial measures to the corresponding GAAP measures.
I will now turn the call over to our Chairman and CEO, Barry Smith.
Thank you, Renie. Good morning and thanks for joining us. I'll begin today with an overview of our third quarter results and follow that with a discussion of the growth strategies of our Pharmacy Management and Healthcare businesses.
As you read our Press Release this morning, for the third quarter of 2015 we produced adjusted net income of $18.9 million, adjusted earnings per share of $0.76 and segment profit of $55.3 million. For the nine months year-to-date period, we produced adjusted net income of $58 million, adjusted EPS of $2.20 and segment profit of $173.4 million. We ended the quarter with $197.8 million of unrestricted cash and investments.
Regarding our share repurchase program, this month we completed our previous 200 million authorization, reflecting an increase in the pace of repurchase activity over the last three months. Since our first optimization of July 2008 we've deployed almost $1.3 billion to repurchase about 26.3 million shares. We continue to evaluate all options for capital deployment in an effort to maximize shareholder value.
This week our Board of Directors authorized a new share repurchase program of up 200 million over a two-year period. This new program demonstrates our continued commitment to balance the deployment of capital for share